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Ford CEO: Trump tariffs would wipe out billions in profits if they’re long lasting

Source Cryptopolitan

Jim Farley, CEO of Ford (F) has joined the rest of the auto industry to warn Trump against them. He reasoned that the US profits would be run over if you hit the world with tariff hikes.

Tariffs have hit the motor industry the most. Elon Musk’s Tesla experienced the greatest hit. It is not a surprise that Ford’s CEO is coming out to speak against the tariffs.

Jim Farley said, “We believe based on our conversations in D.C. with the Trump administration and congressional leaders that they are committed to strengthening, not weakening our nation’s auto industry. That is certainly our expectation.”

He added, “And we look forward to working with our leaders to make sure that that becomes a reality. Because they understand and appreciate how vital our industry is to jobs, the economy, our national security, and the communities across our country.”

Ford CEO Jim Farley warns that with Trump's tariffs we could see "billions of billions of dollars of pressure on the industry, lost jobs, lots of impacts to communities and our ecosystem in the industry" https://t.co/2AjbgNLN3i pic.twitter.com/iqYCjmDeIZ

— Bloomberg TV (@BloombergTV) February 5, 2025

He also spoke about delayed Mexico and Canada Tariffs. He asserted, “There’s no question that tariffs at 25% level from Canada, Mexico […] if they’re protracted, would have a huge impact on our industry. With billions of dollars of industry profits wiped out and adverse effect on the US jobs as well as the entire value system in our industry.”

Generally, every drop in stock is being put on Trump’s tariffs. Even Americans have joined the global community to criticize them. Will Trump and his administration listen? For now, the POTUS has agreed to a 30-day pause on 25% tariffs on Canada and Mexico on Monday.

Tariffs current impact and future impact on the auto industry

Most cars sold in the U.S. have parts made in Mexico or Canada. Some are put together there, but even those made in the U.S. have a lot of parts from Canada and Mexico. Experts say that the tariffs could disrupt car supply lines. UBS researchers estimated that the car industry accounts for 26% of imports from Mexico to the US and 12% from Canada

In the same light, Kelley Blue Book predicts that the average car price could go up by $3,000 if Trump imposes a 25% tax on imports from Mexico and Canada. This might lead people to buy less expensive used cars.

Ford’s sales increased by 5% for the whole year compared to last year. However, adjusted earnings per share fell by 7%. This drop was tied to the company’s struggles mainly because its Model E electric car division lost $5 billion.

Now, Ford’s stock price dropped 6% to $9.53 before the market opened as investors reacted to a disappointing quarter for the company. Ford makes 12% of its goods in Mexico and Canada. This would mean trouble if Trump carried on the Mexico and Canada tariffs.

As a result, in its earnings report, Ford decided to be cautious about its outlook for 2025. It expects running profits to be between $7 billion and $8.5 billion, less than the $10.2 billion from last year. The Street had been expecting $8.3 billion.

Tesla has already succumbed to Trump’s tariffs. On Monday, Tesla’s stock dropped 5%, the largest decline among the top seven biggest companies in the U.S. by market value. Like all car companies, Tesla would be significantly impacted by Trump’s plan for a 25% tariff on Canada and Mexico.

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Disclaimer: For information purposes only. Past performance is not indicative of future results.

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